Campaign Finance: What Role for the Parties?

Coming in the midst of a season of unprecedented political spending, the Supreme Court's Colorado Republican Party decision presents the political parties with a chance for resuscitation even as Congress considered measures that would decimate them. And, as the new sources of funding showed, congressional tinkering with spending limits and the campaign finance law's $1,000 and $5,000 contribution limits seems sadly out of sync.

The 1996 campaign has already seen huge expenditures for issue advocacy ads, voter guides and independent expenditures, and it is unlikely to recede before the elections. Such heavy spending from non-traditional sources means that the candidates and parties, operating under tight limits on what they can receive, become less relevant in today's campaigns. That is especially true of parties, which until the Colorado Republican ruling, were also limited in what they could spend for candidates.

Indeed, the past two decades have seen the parties, once the heart of both political campaigns and American governance, struggle to remain relevant. Regrettably for the health of the parties, the Court did not grant their principal request -- a ruling that any limitation on party spending for their candidates is unconstitutional. This would have put the parties on a level playing field with those outside groups now assuming a much more prominent role in campaigns.

But the Court did permit, in theory, independent expenditures by the parties on their candidates' behalf. This, at least, will stave off the day parties will become truly minor players on the political landscape.

That is especially important because the vast majority of the proposals before Congress seek to further restrict the amount of money available to candidates and the parties. These proposals do not -- because they constitutionally cannot -- do anything about the right of individuals or groups to run issue ads, or distribute voter guides, or produce independent expenditures or spend unlimited personal resources. Of course, the result of restricting the funds of parties and candidates would be to accelerate even more the flow of political dollars to activities outside the Federal Election Campaign Act's limits and reporting requirements. Rather than reduce corruption and the influence of special interests, these restrictions would, more likely, render the campaign laws increasingly irrelevant.

A number of the issues in both proposed legislation and in the Colorado Republican case highlight this. As an initial matter, non-federal (mostly) unreported dollars are paying for these issue advocacy ads and voter guides. While these expenditures do not fall under the FECA because they are about issues, they do affect voters' perceptions of their public officials, who also happen to be on the ballot in November. In the context of all this spending, does it make sense for the FECA to restrict what parties can do directly to advocate their candidates' election either individually or as a ticket?

As a constitutional matter, can Congress limit a political party's ability to engage in robust debate and discussion of candidates and their positions on issues of public importance? As a policy matter, does it make sense to limit what parties can do for their candidates when third party groups using money raised and spent outside of the campaign laws' limits, source prohibitions or even reporting requirements are becoming a dominant force? Should parties' First Amendment rights somehow be given lesser weight than those of corporations or unions to engage in political speech or debates on issues?

The Colorado Republican case for the first time raised before the Court a central issue for which the FECA and the Federal Election Commission have long presumed answers. While the Court in Buckley v. Valeo (1976) upheld limits on large direct contributions to candidates, it had never directly examined whether larger (unlimited) contributions by parties to their candidates present the same risk of quid pro quo corruption. As a policy matter, it is difficult to see how parties can be "corrupting" influences on their candidates. More fundraising by parties and less by candidates means both that any corrupting influences of money are at least filtered before finding their way to candidates, and that candidates can spend more time legislating and campaigning, and less fundraising. Furthermore, parties make full disclosure of all sources of their funds, which cannot be said by issue advocacy groups, non-profit corporations or even those political action committees which receive significant financial assistance from their connected organizations. While Colorado Republican did not answer this issue, it did leave the door open for a more definitive ruling in the future.

With the increase in unlimited issue advocacy and independent expenditure campaigns, parties can play a pivotal role in restoring the importance of candidates and their own campaigns. Parties are the buffer to special interest political activity. If their role is not enhanced, then the role of multi-million dollar issue advocacy ad buys and independent expenditures will be enhanced.

However, a number of the bills before the Congress earlier this year attempted to severely restrict what the parties can do by completely federalizing activities now allocated between the federal and state candidates who benefit.

Passage of such a law would mean that political parties as we know them would cease to exist. The parties' mission is to elect their candidates -- both federal and state. Congress passes laws for federal elections. State legislatures pass laws for state elections. In recognition of the importance of political parties supporting entire tickets, the current law permits "mixed activities" -- those benefiting all candidates such as generic voter registration ("Register to vote Democrat"), voter turnout ("Go to the polls today to back your Republican candidates") and overhead -- to be paid for with a combination of federal and state dollars. The new proposals would allow only federal funds to be used.

This would lead to a dearth of funds with which the parties can contact voters since the funds permissible in state elections (what has come to be known as "soft money") could no longer be used. Depending on what offices are on the ballot, this would mean a reduction of between 50 percent and 80 percent in these voter contact programs. Either fewer voters would be contacted (ironic at a time when the registration gains realized by the so-called "motor voter" law are just coming on line) or third party groups using completely non-federal unreported funds will fill the vacuum.

The larger result would be to reduce the rendering of the traditional party committee to a historical curio. It is false to think that federalizing voter contact party programs, as the legislation proposes, will dry up soft money. The 1980s saw state legislative caucuses come of age and gain light-years in sophistication and fundraising ability. Gubernatorial and other statewide candidates went to school on presidential campaigns and learned the value of voter contact programs.

The bottom line is that if voter contact programs are federalized, state candidates will simply abandon the national parties and set up state-only entities for voter identification, registration and turnout activities.

And guess who will be asked to pay? Those same special interests whose role under federal law would be diminished under the proposed legislation--special interests that are welcome in one form or another in virtually every state. Of course, these contributions won't be reported to the Federal Election Commission as they are now, but it does mean that only clean hard federal dollars will be spent by parties on behalf of federal candidates.

In addition, this would escalate the proliferation of tax-exempt organizations conducting non-partisan voter registration and turnout programs. Since parties won't have the funds, these entities will see a void and a way to deliver a dependable cadre of voters for candidates who share their positions. The irony is that the source of funds for these programs (which will be unlimited and will not have to be reported) will be exactly the corporate, union, trade association and large individual contributions that the new law would prohibit parties from using to conduct the identical activities.

In summation, as the Supreme Court's Colorado Republican ruling chips away at limits on party spending, Congress seems intent on restricting the parties' role. At the same time, massive expenditures by third party groups render the campaign scheme with its $1,000 and $5,000 limits less relevant. This means the programs that parties carry out are crucial, and the Supreme Court's green light for independent expenditures is a positive sign that parties will be around to perform their role.

*Mr. Ginsberg, who formerly served as General Counsel to the Republican National Committee, is a partner at Patton Boggs, L.L.P. in Washington, D.C.